S.V.Sreenivasen, Coimbatore V. ACIT, Coimbatore

ITA 22/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5893 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 04-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PAVITRAN KUMAR
• Assessee Lawyers: S SRIDHAR
• Keywords: Deemed dividend; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI, CAMP AT COIMBATORE ... , ! '#, $ #% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./I.T.A.NOS.2275/CHNY/2018 & 22/CHNY/2019 ( / ASSESSMENT YEARS: 2013-2014 & 2014-15) SHRI. S.V. SREENIVASAN, 278, EAST ARUNACHALAM STREET, R.S. PURAM, COIMBATORE 641 002. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE,-2, COIMBATORE PAN: AIQPS 8095P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI PAVITRAN KUMAR, JCIT /DATE OF HEARING : 05.02.2020 ! /DATE OF PRONOUNCEMENT : 05.02.2020 / O R D E R PER BENCH : THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBAT ORE, DATED 15.06.2018 AND 08.11.2018 AND PERTAINS TO THE ASSES SMENT YEARS 2013-14 2 I.T.A. NOS.2275-18 & 22-19 & 2014-15 RESPECTIVELY. THEREFORE, WE HEARD BOTH T HE APPEALS TOGETHER AND DISPOSING OFF BY THIS COMMON ORDER. 2. THE COMMON ISSUE ARISES FOR CONSIDERATION IN BOT H THE APPEALS IS WITH REGARD TO SECTION 2(22) (E) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 3. SHRI. S. SRIDHAR, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAS RECEIVED ADVANCE FOR PURCHASING LAND FOR THE COMPANY. THE ASSESSEE HAS ALSO ADVANCED RS.2 CRORES TO THE COMPANY DURING THE YEAR 2010-2011 WHICH WAS LYING IN THE CREDIT OF BO OKS OF ACCOUNTS FOR THE YEAR ENDED 31.03.2013. THE ASSESSING OFFICER FOUN D THAT THE MONEY ADVANCED BY THE ASSESSEE TO THE COMPANY AND THE ADV ANCE MADE BY THE COMPANY TO THE ASSESSEE ARE TWO SEPARATE AND DIST INCT ACCOUNTS. THEREFORE BY FOLLOWING THE JUDGMENT OF HONBLE MADR AS HIGH COURT IN THE CASE OF SUNIL KAPOOR VS. CIT, (2015) 63 TAXMANN.COM 97 (MAD ) FOUND THAT THE MONEY RECEIVED BY THE ASSESSEE FROM COMPANY FOR PURCHASE OF LAND IS A DEEMED DIVIDEND. INVITING OUR ATTENTION TO PARA 19 OF THE VERY SAME JUDGMENT, THE LD. COUNSEL SUBMITTED THAT FIVE IN GREDIENTS, AS PROPAGANDED BY THE HONBLE SUPREME COURT IN THE C ASE OF SMT. TARULATA SHYAMS VS. CIT, (1977) 108 ITR 345 WAS NOT CONSIDERED BY THE AO. 3 I.T.A. NOS.2275-18 & 22-19 THEREFORE, THE SAME MAY BE REMITTED BACK TO THE FIL E OF THE ASSESSING OFFICER FOR RE-CONSIDERATION. 4. ON THE CONTRARY, SHRI PAVITRAN KUMAR, THE LD. DE PARTMENTAL REPRESENTATIVE, ADMITTED THAT THERE ARE TWO DIFF ERENT AND DISTINCT ACCOUNTS. THEREFORE AS HELD BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF SUNIL KAPOOR (SUPRA ), THE AO HAS RIGHTLY TAKEN THE MONEY RECEIVE D FROM THE COMPANY AS DEEMED DIVIDEND. THE LD. DR F URTHER SUBMITTED THAT THERE IS NO NEED FOR REMANDING BACK THE ISSUE TO TH E FILE OF THE ASSESSING OFFICER. WHEN THE ATTENTION OF THE LD. DR WAS DRA WN TO THE OBSERVATION MADE BY THE MADRAS HIGH COURT IN PARA 19, THE LD. DR VERY FAIRLY SUBMITTED THAT THIS WAS NOT CONSIDERED BY THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE ARE TWO SEPARATE AND DISTINCT ACCOUNTS MAINTAINED BY THE COMPANY, ONE IS FOR MONEY RECEIVED BY THE ASSESSEE TO THE EXTENT OF RS .2 CRORES AND ANOTHER ACCOUNT FOR THE MONEY ADVANCED TO THE ASSESSEE FOR PURCHASE OF LAND. THE FACT THAT THE FIVE INGREDIENTS AS POINTED OUT BY THE SUPREME COURT IN THE CASE OF TARULATA SHYAM (SUPRA ) WAS NOT EXAMINED AND BROUGHT ON RECORD BY THE AO AS WELL AS CIT(A) IS NOT IN DISPUTE. THE REFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS MATTER NEEDS TO BE RE-EXAMINED BY THE 4 I.T.A. NOS.2275-18 & 22-19 AO. ACCORDINGLY THE ORDERS OF THE BOTH LOWER AUTH ORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO TH E FILE OF THE AO FOR RECONSIDERATION. THE AO SHALL RE-EXAMINE THE MATER IAL WITH THE LIGHT OF THE FIVE INGREDIENTS AS POINTED BY THE APEX COURT IN TH E CASE OF SMT. TARULATA SHYAMS (SUPRA) AND BROUGHT ON RECORD, WHETHER THE TRANSACTION OF A DVANCE MADE BY THE COMPANY TO THE ASSESSEE FALLS WITHIN T HE AMBIT OF FIVE INGREDIENTS AS POINTED OUT BY THE APEX COURT, THEREAFTER THE AO SHALL DECIDE THE ISSUE AFRESH AFTER GIVING A REASONABLE HEARING OF OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. THE ASSESSEE HAS ALSO TAKEN ONE MORE GROUND IN I TA NO.22/CHNY/2019 FOR THE ASSESSMENT YEAR 2014-2015 W ITH REGARD TO THE EXPENDITURE DISALLOWED U/S.14A OF THE ACT. 7. THE LD. COUNSEL FAIRLY SUBMITTED THAT HE IS NOT PRESSING THIS ISSUE ON THE INSTRUCTION FROM THE ASSESSEE. THE LD. COUN SEL MADE AN ENDORSEMENT TO THIS EFFECT IN THE APPEAL FOLDER AS THIS GROUND WAS NO T PRESSED. ACCORDINGLY, THE GROUND WITH REGARD TO DI SALLOWANCE MADE BY THE AO U/S.14A OF THE ACT IS REJECTED. 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE IN ITA NO.2275/CHNY/2018 FOR ASSESSMENT YEAR 2013-2014 IS ALLOWED FOR 5 I.T.A. NOS.2275-18 & 22-19 STATISTICAL PURPOSES, WHEREAS ITA NO.22/CHNY/2019 F OR ASSESSMENT YEAR 2014-2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE COURT ON 5 TH FEBRUARY, 2020 AT CAMP AT COIMBATORE. SD/- SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER (... ) (N.R.S. GANESAN) / JUDICIAL MEMBER /COIMBATORE. /DATED, THE 5 TH FEBRUARY, 2020. KV #$ %&'& /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. &+, - /DR 6. ,./ /GF